NLRB v. C & C PLYWOOD CORP.

Print this transcript Transcript: 

Argument of Friedman

Chief Justice Earl Warren: National Labor Relations Board petitioner versus C & C Plywood Corporation.

Mr. Friedman.

Mr. Friedman: Mr. Chief Justice and may have pleased the Court.

This case here on the read of certiorari to the Ninth Circuit presents a question related to the one that was before the Court yesterday in the Acme case.

Here, a union filed with the National Labor Relations Board a charge that an employer had failed to bargain in violation of Section 985 Act, because of certain unilateral changes in wages that the employer had made during the term of the contract.

The employer offered as a defense, that what he had done was sanctioned by the terms of the collective bargaining contract.

And the question presented in the case is whether in order to determine the unfair labor practice charge, the National Labor Relations Board has authority to interpret the collective bargaining agreement rather than as the Court of Appeals held, the board is required to re-meet the parties to a judicial lawsuit in order to have that issue determine because in this case, unlike the Acme case, the contract does not contain an arbitration provision.

The company is a manufacturer of plywood and the employees involved here are members of something called a ““glue spreader”” crew.

This is a group of employees who glues together the various pieces of the wood that combine to make the finished piece of plywood.

The crew ordinarily consists of four employees and these four employees have broken down into three different categories of workers.

The company ended into a collective bargaining agreement with the Union under which particular wages was set for each of these three different jobs in the “glue spreader” crew, rending from $2.15 to $2.29 an hour, and the contract also provided that during its term, the wages would be closed.

Paragraph 17 of the contract, which is a critical paragraphing above here and set forth at the bottom of page 67 of the record, after stating that the employer and the Union had agreed upon a classified wage scale which was incorporated in the contract went on to state that the employer reserves the right to pay a premium rate over and above the contractual classified wage rights to reward any particular employee for some special fitness, skill, aptitude or the like.

Three weeks after this contract had been signed, without consulting a bargaining with the Union, the company inaugurated what it called a premium pay plan for the “glue spreaders”.

That plan is set forth to page 73 of the record, and what it provided in essence was that whenever, in any particular one-week period, the glue crew, the four members, exceeded a certain production quota, each member of the crew was to get not the schedule rate in the contract that a higher amount of $2.15 an hour, every member of the crew was to get this.

It was not tied to the performance of any individual person.

The Union found out about this plan when a member of the Union brought a copy of the thing and the Union and the company then met on two occasions in which the Union protested that this proposed glue spreader plan was not justified under the terms of the collective bargaining agreement as the Union explained to the company in its view that this was not just a change in wages but a basic change in the method of computing wages.

It was not just giving a premium but involved a shift in computing wages from a straight alley basis to a production basis and therefore, in the Union's view is not justified by the contract.

The company on the other hand, contended that it was justified by the contract and refused to cancel the plan and then the Union filed a charge with the Board alleging that the company engaged in an unfair labor practice by instituting this plan.

Justice Byron R. White: Has the company ever claimed that this action would not have been an unfair labor practice even if there had been no premium pay provision on the contract?

Mr. Friedman: I don't believe so Mr. Justice that the whole controversy from the company's point of view has turned on their claim that under this provision of the contract, it was -- they were justified in what they did.

The -- at the full usual administrative proceedings, the Board held that in initiating this premium pay plan, the company had refused to bargain in violation of Section 8 (a)(5) and it entered an order in effect directing the company not to institute such a plan without first bargaining with the Union and if the Union were to request it to resend the particular plan that it had inaugurated.

The Board rejected the company's contention that it lacked jurisdiction to determine the unfair labor practice because in order to do so, it would have to interpret the terms of the contract.

Justice Byron R. White: So what would be the Government's position if these two parties in fact really agreed to permit the Government or permit the employer to raise wages whenever he wanted to?

Mr. Friedman: Well this would -- this Mr. Justice would present a difficult problem which I will come to the implication to this in a minute because our basic position in this case is that an employer cannot, without bargaining with the Union under Section 8 (a)(5) unilaterally change terms and conditions of employment.

Justice Byron R. White: It can't be that the Union agreed in advance to let them do it?

Mr. Friedman: Well, the Union has the right to waive rights under the contract and the question in that case would be, whether what was done was sufficient in all the circumstances to constitute a waiver.

There have been as was suggested yesterday's argument that the Board's power to deal with unfair labor practices under Section 10 (a) is not limited by any other existing remedy and the question would be whether in all the circumstances, the --

Justice Byron R. White: Well in this particular case, if a court or this Court found that this factual provision justified the plan that the employer -- covered the plan, that the employer actually put in, would the Government -- is that in the case as far as you are concerned?

Mr. Friedman: We don't think that is in the case Mr. Justice.

Justice Byron R. White: I thought that that's in the case?

Mr. Friedman: Is that end -- well the Board wouldn't think so.

I can't answer that question unequivocally.

Justice Byron R. White: That's the only issue that's here though.

Mr. Friedman: No, Mr. Justice.

We think that the real issue was whether the Board has the authority to interpret the contract that was --

Justice Byron R. White: I understand -- I understand that but let's assume that they do have the authority and they did it wrong and that the contract doesn't mean what the Board said it means and that the contract really permits this plan.

Mr. Friedman: Well, if --

Justice Byron R. White: And then -- then that's the end of the case as far as the Board's concerned.

Mr. Friedman: If -- if this Court would hold that this provision of the contract does not -- does permit this plan, I would seem that that would be the end of the case but what I'm suggesting Mr. Justice is --

Justice Byron R. White: Well, I know that's -- that's my question.

Mr. Friedman: And then I'm coming back a moment to what the Board held in this case.

It pointed out that it has frequently interpreted contracts in performing its functions under the Act and in this particular case, there was no proceeding had been invoked by the parties.

There was no pending arbitration proceeding either before a court or an arbitrator and therefore the reasons which sometimes lead the Board to defer to the tendency of another proceeding were not present here.

The Board then turned, went on an interpreted a particular contract and it concluded on the basis of its examination of the language of the contract and the negotiations between the parties that the purpose of this provision, this premium pay plan, was only to give the employer the right to make individual merit increases for the special competence of a particular employee but not to select a group of employees and unilaterally to change the basic method of compensating them from a straight time basis to a production basis.

And in reaching this conclusion, the Board concluded that what had been done by the Union in this case did not amount to a waiver on its part of the right to bargain about what it called a wage incentive system.

The Court of Appeals refused to enforce the Board's order.

It stated its problems, it said, since the existence or nonexistence of an unfair labor practice, does not turn entirely upon the provisions of the Act.

But arguably upon a good faith dispute as to the correct meaning of the provisions of the collective bargaining agreement, the Board had no jurisdiction to proceed because it said, whether or not this contract authorize what the company had done, was a matter to be decided by an arbitrator if there was an arbitration provision or if no such provision to be adjudicated by the Court.

Now, the answer I think we can fairly say that we and the respondent are in common ground on two general propositions.

First, that the Board has no general authority to enforce collective bargaining agreements.

And secondly, that the mere breach of a collective bargaining agreement of itself is not enough to create and give rise to an unfair labor practice.

Will we part company with the respondent in this case is when it argues that here, basically the unfair labor practice rest upon the breach of the contract.

We think that is not the basis here.

That here, the unfair labor practice rested on the company's failure to perform its duty to bargain with the employer -- with the Union before making any material changes in terms and conditions of employment.

I think the Board stated its philosophy of the decision in this case very well at the bottom page 96, where it said that in filing its unfair labor practice, the Union was complaining not of a violation of its contract with respondent but of the invasion of its statutory right as collective bargaining representative of employees in the unit to bargain about any changes in the terms and condition of employment for such employee.

So as we see the case here, basically, we think it involves three issues.

One, whether apart from the terms of the collective bargaining agreement, what the employer did here constituted is the refusal to bargain.

Two, whether the Board was authorized in itself interpreting the contract rather than leaving it to the parties to go to court, and three, whether in the fact to this case, the Board's interpretation of the contract was proper one.

Now I'd like the first turn of the threshold issue of refusal to bargain which as far as I can tell the respondent does not challenged here but since this is the keystone of the Board's decision, I think it's a accordant to deal with it briefly.

The duty with Section 8 (a)(5) imposes on an Employer and a Union to bargain collectively is defined in Section 8 (d) as the performance of the mutual obligation of the Employer and the Union to meet at reasonable times and confer in good faith with respect to wages, hours and other terms and conditions of employment for a negotiation of any agreement or any question arising there under.

Justice Potter Stewart: Now, the employer here as I understand it says, “We did bargain.

We did bargain in good faith and we provided in our collective bargaining agreement for our liberty to do just what we did here.

And when you're asking us not to bargain about this, it's you, the Union who is in bad faith because we bargained about that and reach to an agreement.”

Mr. Friedman: Well that Mr. Justice, the Union -- it isn't that the Union is asking the Employer to bargain -- our position is that during the term of the collective bargaining agreement, if the employer attempts unilaterally without bargaining with the Union to make any substantial modifications in that thing, he cannot do it.

Justice Potter Stewart: Well of course, the employer's position is, I'm not making any modifications in the contract, I'm simply doing what I was permitted to do as a result of our previous collective bargaining.

Mr. Friedman: That's right, but that I would suggest Mr. Justice is a defense basically.

This is something you --

Justice Potter Stewart: Well, what I wonder what the point of collective bargaining is, if you can never reach a bargain that sticks.

Mr. Friedman: Well, you can Mr. Justice if they had reached the bargain.

But the question in the case is whether what the Union agreed to in this case, in effect gave the employer authority to make this kind of a change which the employer says he did have.

And we say that on the circumstances it did not authorize the employer to make a change.

But we further say that in deciding whether there has been a refusal to bargain here, the Board is authorized to examine the basis on which the employer purported to justify what he had done.

Now, this as was developed also during the argument in the preceding case the duty of the bargaining we think clearly is not limited just to working out the initial terms of the collective bargaining agreement that continues during the life of the contract.

Now, four years ago in the Katz case, this Court held that where during negotiations, an employer unilaterally and without consulting with the Union, made significant changes in the rights of pay in sick leave, that that constituted a refusal to bargain without regard to the employer's good faith.

And as I put it in so holding that such unilateral changes said, frustrates the objectives of Section 8(a)(5) much as does a flat refusal to negotiate at all.

And we think the same reasoning requires that during the term of a collective agreement, after the agreement has been added on into, similarly, neither side can make unilateral changes without conferring with the other.

The basic philosophy of the whole concept of requiring collective bargaining embodied in 8(a)(5), is that industrial peace will be furthered.

If the parties to a contract before making changes get together and talk about it, they don't have to reach agreement that's explicit in the statute.

But we think they do have to get together and talk about it and therefore, the philosophy of the statute is neither side can make significant changes in the basic employment relationship, the terms and conditions of employment without first considering, without first consulting and discussing it with the other side.

Now in this case, we think it's very clearly that the change that the employer made was a significant change.

Under the contract, does it previously existed --

Justice Byron R. White: Well, speaking of the Employer (Inaudible).

Mr. Friedman: Well, let me -- I'm going to have to answer your -- answer you Mr. Justice in two stages.

The order in this case, the only unfair labor practice found in this case was the refusal to bargain.

And of course, the whole -- I think the whole theory of it is, if the employer had said to the Union, “We now propose to institute this plan and if you'd like to discuss it, fine.”

In the course of the discussion, there may have been some changes.

The Union might have been able to talk the employer out of it.

Justice Byron R. White: Employer said (Inaudible)

Mr. Friedman: Well then it's --

Justice Byron R. White: They can't do it.

Mr. Friedman: Then it seems to me Mr. Justice -- then the employer has satisfied his duty under this order to bargain.

That's what --

Justice Byron R. White: (Inaudible)

Mr. Friedman: Pardon?

Justice Byron R. White: (Inaudible)

Mr. Friedman: In this case, what happened was, the employer without consulting with the Union inaugurated this plan.

Then they met after the plan had been inaugurated and the Union tried to get them to resend it and the employer said, “No, we think we are authorized by the contract.”

But it seems to me that there's a very great difference between bargaining between the parties before you do something and bargaining after it has been done and attempt to resend it.

Justice Byron R. White: But what happened after the (Inaudible)?

Mr. Friedman: That is correct under this case.

Now I have to in all candor state that since this decision, the Board has gone somewhat beyond the position has taken here, in the C and S case, which we sided into our brief -- the Board is going beyond this and they said that in this situation Section 8(d) of the Act, precludes the employer for making even a unilateral change after bargain, they construe Section 8(d) is saying that during the term of a contract, an employer has no right to modified in significant respect so that under that decision, a broader order would have been independent than in this case.

But in this case, the Board did not go that far and at the present time, quite frankly, the Board's thinking in this, on this subject is in a developing area.

But as far as this case is concerned, as far as this order is concerned, all of this order requires the company to do is to bargain with the employee -- with the Union before inaugurating this plan.

Now I like to come back to a minute to the significance of the change that was made here, because I think this is very critical.

Before this provision have been inaugurated, each member of this crew received a different wage with presumably reflected the varying skills, range from $2.14 or $2.15 to $2.29, and the record shows, this was one of the things that was very carefully put out in the negotiations.

Under this plan, the distinctions between the different members of the Union have been abandoned.

What happens is, once the “glue spreader” crew exceeds the production standard set here, every member gets $2.50.

The lowest paid man who used to get to $2.15 gets $2 and a half.

The highest paid man who used to get $2.29 gets $2 and a half.

If in fact, there's one man of this four-member crew who is inefficient, but despite that the other three members are so efficient that they can manage to achieve the production quota, they all four get the $2 and a half.

Now --

Justice Potter Stewart: This goes to, this goes to -- this argument goes to the merit so to speak, i.e. to whether or not this collective bargaining agreement permitted the employer to do what he did.

Mr. Friedman: This goes

Justice Potter Stewart: And those covered by the provision in the --

Mr. Friedman: This goes to the merit but also I was also tending to show that the change that was made here was a very significant change.

It wasn't just a minor adjustment.

It was a basic change in the way on which wage is calculated.

Justice Potter Stewart: Well, it doesn't it still go to the question of whether or not the employer on this collective bargaining agreement in that provision that permits him to pay premium pay, whether or not that provision covered what he did here.

Mr. Friedman: Yes, that's correct.

And this brings me Mr. Justice if may discuss that in the context of why we think the Board in this kind of a case does have authority to interpret the collective bargaining agreement.

I won't labor because it was discussed considerably yesterday the statutory language itself in Section 10 (a) which provides that the Board's power to deal with unfair labor practices should not be in any way affected by other means of adjustment or prevention established by agreement law or otherwise because it seems very clear to us that if the Board is not authorized to interpret a collective bargaining agreement, when it comes to pass on an unfair labor practice, its power to prevent such practices would be affected.

For one thing, it's just a matter of the time it takes.

The parties have to first go and institute a lawsuit.

It's bound to take a lot longer than the Board the proceeding.

Indeed the Court of Appeals itself recognized this but said, it didn't think that made any difference.

It's also significant we think that this proviso of the Section 10 (a) was part of the original Wagner Act and in the legislative history of the 1947 Labor Management Act, Congress consciously decided to retain this provision.

And in so doing, it stated that the remedies before the Board to deal with an unfair labor practice were intended to be in addition to and not in lieu of with other -- what other remedies might be available in another forum.

Justice William J. Brennan: Mr. Friedman, have we had occasion to interpret 10 (a)?

Mr. Friedman: 10 (a)?

Justice William J. Brennan: Here.

Have we in this Court had occasion in other cases that refer to 10 (a)?

I don't remember any.

Mr. Friedman: I don't remember any case on that Mr. Justice.

Now, coming to the -- Mr. Justice, I think I stand corrected.

In some of the preemption cases, I think the Court has talked about that proviso (Voice Overlap).

Justice Byron R. White: We talked about it in Smith, didn't we?

Mr. Friedman: I think so Mr. Justice and also I think in Carey-Westinghouse.

And I think that in both of those cases, the Court did indicate that the existence of the judicial remedy would not oust the Board of its jurisdiction.

Now, I'd like to also comment.

Therefore, it seems in the light of this that the Board should not be deemed to be precluded from dealing with this matter, unless to a very strong policy considerations which dictated in favor of giving exclusive authority in this area to the Court.

So we think the policy considerations, not only don't reached that result, but affirmatively support to the Board's jurisdiction.

Justice William J. Brennan: Did I understand you to say earlier Mr. Friedman in response to Justice White's question that if the Court interpreted this provision as the company interprets it, that this nevertheless was not preclude the Board from proceeding?

Mr. Friedman: That's correct.

As a matter of power -- as a matter of power, I don't think the Board --

Justice William J. Brennan: Do you remember that, it's not the Court, the same agency -- remember the Texas Gas Transmission case?

Mr. Friedman: No, I'm afraid I don't.

Justice William J. Brennan: Now, that was involved with Federal Power Commission in 363, where we held with the -- an interpretation of an agreement by the Federal Power Commission was not to be regarded as something within its expertise so called.

Now, the Courts are indeed better equipped to interpret the agreement by traditional principles in interpretation in our agencies.

And in consequence, the Federal Power Commission did not rely on the principle that the -- its interpretation came within that special expertise -- the deference expertise, of course sort of prior to give the agency.

Do we have anything like that involved in this case?

Mr. Friedman: Well, I would -- we'll allow to deference Mr. Justice, I would suggest that when we're dealing with this kind of a problem, the Board's expertise should be given great weight.

Let me see if I could explain that position to you.

Justice William J. Brennan: Now this is independently of the 10(a) argument --

Mr. Friedman: This is independently of the 10 (a) argument.

There is the fact of course that I don't know all the details of the Power Act.

So I don't believe if it's anything comparable.

Justice William J. Brennan: Well, I don't I recall that there was any comparable --

Mr. Friedman: I don't believe.

But in determining that the question, the ultimate question in terms of interpreting the contract, is whether when the Union agreed that the employer could have the right to pay a premium pay over and above the contractual classified rate to award any employee.

The question in that instance is whether this authorized them to inaugurate a plan covering groups of employees, changing the basis or merely to single out a particular employee and say, “You employee Brown, you are very skilled.

We're going to pay you not $2.25 but $2.40.”

As I might add, there was an instance, there was one employee that the record shows, but why at the time of this -- time for this negotiation was being paid the premium rate.

He was getting $2.40 although the contract was $2.29.

Now, we would suggest that in answering that question, it's not enough just to look at the particular terms of the contract when what you're trying to find out is whether in doing this thing, the employer has violated his duty to bargain.

Because the whole question it seems to us is so intertwined with the subject of collective bargaining with the Federal Labor Policy.

That to answer this question calls to something more than just the kind of analysis that a court would traditionally make in interpreting the contract.

They come into play -- it comes into play for example, the well-settled rule under the National Labor Relations Act that the courts have repeatedly upheld, that a waiver of statutory rights will not be implied unless it is clearly and unquestionably set forth.

Now, we have here a history of bargaining negotiations between the Employer and the Union.

And in the course of these negotiations on one or two occasions, some reference was made to the employer considering the inauguration of a premium paid plan for the “glue spreader” crew.

There's nothing -- and one of the instance the Union said, nothing on the other instance when the employer referred to the fact that another company in the area had proposed such a plan but had withdrawn it when that Union objected, the Union representative said they couldn't agree to such a thing.

Justice Abe Fortas: Mr. Friedman, how would you state the principle for which your contending here that is to say you've told us that you don't contend that the Board has general power to interpret collective bargaining agreements.

Mr. Friedman: That's correct.

Justice Abe Fortas: On the other hand, the Board does have the power with respect to unfair labor practices.

Now, how do you -- how would you formulate a bridge between those two principles?

Mr. Friedman: Well, I would say Mr. Justice that where it is necessary to interpret a collective bargaining agreement, in order to ascertain whether there has been an unfair labor practice.

The Board in carrying out its statutory duties to determine unfair labor practices made to that extent interprets the contract.

Justice Abe Fortas: And I suppose you can add to that assuming always that the mere violation of the collective bargaining agreement is not an unfair labor practice.

Mr. Friedman: That's right.

There may be many situations where the violation of a collective bargaining agreement will give rise both to a possible action of breach of contract and to an unfair labor practice.

And of course the Board -- this is not the only area where the Board has to interpret collective bargaining agreements that --

Justice Abe Fortas: So they find now whether the Board has power in the particular circumstances to interpret a collective bargaining agreement, you've got to find out -- you've got to go to the end of the process and say, “How did it interpret it for a work purpose and with work consequences?”

Mr. Friedman: That is -- I think that is correct Mr. Justice.

And as I say, that the Board for example, that there are certain portions of the statute where the mere entering into of a particular type of collective bargaining agreement is unfair labor practice.

Such as entering to a hot cargo bringing all aboard there, it's never been suggested to our knowledge that when it's charged to the particular contract is a violation of the hot cargo provision, that it's necessary for the Board to defer.

Similarly when on the Board has to determine a dispute -- a representation dispute on the 10(a), it traditionally interprets the provisions of the collective bargaining agreement.

Justice Byron R. White: Well, Mr. Friedman, to the extent that you feel that the contract interpretation issue where unfair labor practice really invokes the expertise of the Board.

I would think that -- then you're almost saying that the Board's interpretation is pretty close to final and that the Court shouldn't to disturb it.

And also I would think that the -- if somebody happen to come into a 301 suits.

Let's assume the employer sued on the provision and the Labor Union said, “No, you can't sue at all.

You'd better go to the Board.

This is one of those things where the Board's expertise is critical.”

At least they'd say that if it's critical or you say it is, in this case.

Mr. Friedman: Well I think --

Justice Byron R. White: Why wouldn't there be a primary jurisdiction then in 301 suits where the contract division overlaps an unfair labor practice --

Mr. Friedman: I think there Mr. Justice we would say that the Congress in an act in 301 intended to open up broadly the federal courts and this Court's decisions I think in the preemption case have indicated that this --

Justice Byron R. White: Well then Congress doesn't -- must not feel a labor expertise is so critical.

Mr. Friedman: Well the Congress --

Justice Byron R. White: Contracts?

Mr. Friedman: -- Congress in those situations Mr. Justice I suggest was not addressing itself to the problem of the Board's authority to remedy unfair labor practice as it was addressing itself to the question of what remedy is the best --

Justice Byron R. White: That's a different question.

We're not talking about the Board's authority.

We're talking about the effect of the Board's action in interpreting contract whether how much deference you must pay to it.

Mr. Friedman: Well, I would think in this situation the Board's interpretation should be given very substantial deference by the Court of Appeals.

Justice Byron R. White: Well, I'm just saying that if you do, if that's the Government's position, you really should say that Smith against Evening News Association should be overruled.

Mr. Friedman: No, we support in fact the Government urge --

Justice Byron R. White: Well I know, and I know -- I just don't understand how your position here is consistent with the position you took there.

Mr. Friedman: Well I think -- I think Mr. Justice, it's consistent because there are different problems it seems to me.

In the 301 suit, in the 301 suit --

Justice Byron R. White: I remember, we're not talking about the questions of power.

Either the -- under 301, under the Board's authority or either one can -- I mean the Board can go ahead and take of its unfair labor practice and the Court can give a remedy for breach of contract in the 301.

But the real question is, if the Board is so expertise that its opinion should overwrite that of court.

And the Court, the Court gives a remedy on 301 and other referent to the Board.

Mr. Friedman: Well I would -- perhaps Mr. Justice, what I was trying to suggest was that in the 301 suit the issue is framed in the Court ordinarily in a much narrower context than before the Board.

I was suggesting, the Board's expertise is important in this area because the question of contract instruction in an unfair labor practice proceeding is tied in with the question of statutory violation whereas in the 301 suit, it's ordinarily only the question contract interpretation.

Justice Byron R. White: Was this the breach of contract?

Mr. Friedman: I would think it may have been.

I would think it probably was.

Justice Byron R. White: Well, the Union sort of -- you think the Union -- let's just assume the Union hadn't gone to the Board but it's on the Court sued under 301, for breach of contract to enforce a contract.

Now if you think the Board's opinion is so critical, I would have think the employer could have send one out, let's just hold up that the Court will give the opinion on the Board.

Mr. Friedman: Well, but Mr. Justice if I may come back in such a suit by the Union, the only question would be whether or not the contract authorizes, who wouldn't get to the -- any questions as to whether the question of suggestion go way with the statutory rights, you wouldn't have to get-in in the 301 suit to the problem of whether there was a refusal to bargain.

Whereas it seems to me the Board's expertise comes into play in evaluating the contract in the light of the statutory policies reflected in the Labor Act.

Chief Justice Earl Warren: Mr. Tichy.

Argument of George J. Tichy

Mr. George J. Tichy: Mr. Chief Justice, may it please this Honorable Court.

Irrespective of how it is said, the issue here is a very simple one.

That issue is, does the National Labor Relations Board have the right and jurisdiction to adjudicate an unfair labor practice when it sole and only basis for doing so is to interpret and construe the collective bargaining agreement of the parties?

We are convinced it does not have that right.

Counsel for the Solicitor General has pointed out the pertinent provision of the contract upon which the employer relied throughout these proceedings.

Namely, the contract after setting forth a classified wage scale went on and stated, “To the employer reserves the right to pay a premium pay over and above the contractual classified wage rate -- excuse me, to reward any particular employee for some especial skill, fitness skill aptitude and the like.”

This is the provision of the contract upon which the employer relied and upon which the Board placed its most unusual interpretation.

Justice John M. Harlan: (Inaudible)

Mr. George J. Tichy: I would think not, and to this point if I may have the indulgence of the Court.

The Board argument inherently implies that all matter is not agreed upon in bargaining, remain subject to bargaining before a change is permitted.

We do not subscribe to that argument.

We believe that this -- as this Court stated in the Warrior & Gulf decision, the collective bargaining agreement is more than a contract.

It is a generalized “to govern a myriad of cases, which the draftsman cannot wholly anticipate.”

To continue this Court through Justice Douglas stated, “Collective bargaining agreements regulate or restrict the exercise of management functions.

They do not oust management from the performance of them.

Management hires and fires, pays and promotes, supervises and plans, all of these are a part of its function.

And absent a collective bargaining agreement, it may be exercised freely as limited by public law and by the willingness of employees to work under the particular unilaterally imposed conditions.

A collective bargaining agreement may treat only with certain specific practices leaving the rest to management, but subject to the possibility of a work stoppage or work stoppages” and that conclude the quote.

It is our view that this residual management rights are totally ignored in the Board's concept that's presented here.

This concept also is overwhelmingly accepted by the labor arbitrators in the labor arbitration practice.

The American Bar Association Labor Relation section devoted a part three as I recall of its discussion on labor arbitration to this very point.

While there was an effective, but I would say a minority dissent, it is clear that the large bulk of the section and the -- those on the committee and of arbitrators do feel that these residual rights do exist just as Justice Douglas pointed out in this case.

Did I answer your question sir?

Justice John M. Harlan: (Inaudible)

Mr. George J. Tichy: The Board's authority is statutory.

Without the statute, there is no Board.

The authority given the Board under that statute while broad is not limitless.

Here, the Board seeks to exercise the authority to administer and interpret a labor contract under a refusal to bargain unfair labor practice.

Yet neither the language of the statute nor the legislative history authorizes this.

The language of the refusal to bargain unfair labor practice was the same in the original Wagner Act passed in 1935 as it is now.

In 1946 and 1947, Congress was very concerned with the usurpation of authority by the Board under this particular provision.

And we add at no time in that period, prior to 1946 and 1947, had the Board gone as far as it has gone in this case.

Attention is directed to the respondents brief at page 38, footnote 21.

There, we have a very cryptic analysis of the House Committee on Education and Labor in which that committee pointed out, “Unless Congress rights into the law guides for the Board to follow, the Board may attempt to carry this process still further to seek to control more and more of the terms of collective bargaining agreements.”

As a consequence, Congress did not leave it to the Board to make this determination and in Section 8(d) chose to define the terms to bargain collectively.

In doing so, it is our belief that what Congress sought to do was to create an atmosphere under which collective bargaining could thrive, not to determine the terms of the agreement itself.

The clause or the section itself points out that the obligation to bargain should not compel either party to agree to a proposal or require the making of a concession.

Congress also went out -- went on at great lengths to spell out the rights and the duties involved.

The legislative history of this statute shows that the Senate in 1947, in the Bill it passed provided that the violation of a collective bargaining agreement would be an unfair labor practice.

But when the Bill got into conference, the House is not having a comparable provision prevailed and that portion of the legislation was dropped.

It is clear that the refusal to bargain unfair labor practice was not intended to encompass contract administration as is further evidenced by the remarks of the manager of the Senate Conferees, the late Senator Robert Taft which is quoted in our respondents brief at pages 49 and 50.

He knows it that while the Senate Conferees yielded on the elimination of the violation of contract, unfair labor practice.

They retained their other amendment which was new to the Act namely Section 301, which authorizes federal court jurisdiction and labor contract controversy.

He concluded, “If both provisions had remained,” that is both the violation of contract unfair labor practice and Section 301, “there would have been a probable conflict of remedies and decisions.”

That is -- thus, it is clear that Congress did not concede that there would be a conflict of remedies and decisions by leaving in the refusal to bargain unfair labor practice, at the same time that Section 301 was enacted.

Justice Abe Fortas: Mr. Tichy may I ask you a question, I mean two questions.

Suppose this contract did not have under such provision in it, with respect to the employer's right increase in wages, and suppose the employer did what it did in this case, would the -- would the Board have jurisdiction that adjudicated unfair labor practice?

Mr. George J. Tichy: In response to the other justices' question, this was the point I was hoping that I had covered and I'm happy that you ask the question because --

Justice Abe Fortas: I'm -- I'm very sorry.

Mr. George J. Tichy: No, no, no.

Justice Abe Fortas: I didn't understand it.

Could you answer me briefly.

Mr. George J. Tichy: I find that my communication sometimes is not good and I'm glad that you have asked the question.

The concept as we view it is that --

Justice Abe Fortas: I just want a brief answer to my question.

Mr. George J. Tichy: Well management has the right -- no, there shouldn't have been unfair labor practice, I apologize.

Justice Abe Fortas: The Board would not have jurisdiction.

Mr. George J. Tichy: I would say the Board would not have jurisdiction unless, in the course of this situation, the employer had engaged in other aspects common to unfair labor practices, anti-unanimous, bad faith --

Justice Abe Fortas: Come on let's get back to my question, just very simply.

Let's suppose there were no contract provision here, such as you're relying on that is to say no provision enabling the employer to increase wage rates for an individual or a group.

Is that much of my question clear?

Mr. George J. Tichy: Yes, sir.

Justice Abe Fortas: And let us suppose that the employer did precisely what your client did in this case.

Is that clear?

Mr. George J. Tichy: Yes, sir.

Justice Abe Fortas: Now my question to you is this.

On your theory, when the Board, the National Labor Relations Board have jurisdiction to adjudicate a complaint filed by the Union charging an unfair labor practice?

Mr. George J. Tichy: I would say not.

Justice Abe Fortas: Alright.

Mr. George J. Tichy: Under the Warrior & Gulf decision.

Justice Abe Fortas: You would say that even there, so you don't depend upon the existence of the contract provision?

Mr. George J. Tichy: In this case, I depend upon it because I feel that it is an essential part of the facts but I believe stepping one side -- one step away from this case in response to your question.

No, I don't believe unfair labor practice exists in that.

Justice Abe Fortas: Well I'm not asking whether it exist, I'm asking whether the Board would have jurisdiction.

And what you're telling me now is that even though the -- I would assume that the situation and that put to you, it would not turn upon an interpretation of the collective bargaining agreement.

Mr. George J. Tichy: And this is where I believe is Warrior & Gulf decision applies, that they wouldn't have jurisdiction because all that a collective bargaining agreement seeks to do is to govern management.

That is one of the elements, substantial elements.

Justice Abe Fortas: So your theory is that once collective bargaining agreement has been entered into that -- whatever the employer does with respect to wages cannot constitute an unfair labor practice.

Mr. George J. Tichy: No.

We can find alternates to that where the necessity to bargain I think would be a part of it.

Let us assume for the moment a new job, one that had never existed before, for which no rate had been set or negotiated.

I believe that there -- the employer has the responsibility of negotiating the rate of that job with the Union.

Justice Abe Fortas: Well if I correctly understand you, that you are saying is that once a collective bargaining agreement has been reached, an employer has the right to change to increase wages and a no circumstances where the Board had jurisdiction to entertain a complaint at the particular increase in wages constitutes an unfair labor practice.

Mr. George J. Tichy: I wouldn't like to say under no circumstances.

But at the moment, I would say that the answer to your question is yes.

They would not have that right as I view the present posture of the labor law although I acknowledge the fact that there is a dissent to that view.

Finally, the conference report of which was the outgrowth of the Senate and the House deliberations in the passage of the Taft-Hartley Act conclusively buttresses the respondent's contention here when it concludes with this language and “Once party's have made a collective bargaining contract, the enforcement of that contract should be left to the usual process of the law.”

And I would like to add because I feel that this is an essential and a very important part of this quote.

They continued, “And not to the National Labor Relations Board.”

The conclusion that Congress did not intend that the Board should have the right to interpret construe and force or administer labor contract either indirectly or directly is also evidenced by the fact the 73rd Congress in 1934, the Congress immediately preceding the 74th which in 1935 passed the Wagner Act, amended the Railway Labor Act establishing the National Railroad Adjustment Board.

In that Legislation, Congress spelled out that the National Railroad Adjustment Board was to have jurisdiction to resolve the speech between employees, unions and carriers growing out of grievances or out of the interpretation or application of railroad labor agreements.

If Congress had intended that the National Labor Relations Board surely involve itself in the administration of labor contract, it certainly had the skill and the precedent on how to write such a statute.

Since Congress did not choose to apply even remotely the language used to establish the jurisdiction of the National Railroad Adjustment Board to the National Labor Relations Board, it is conclusive that Congress did not intend that the National Labor Relations Board should exercise the authority that it search here.

The refusal to bargain unfair labor practice has been stated in the same language from the inception of this legislation.

Yet, in well over 25 years, through ever changing personnel of different political motivations, no effort was made by the Board to assert itself in a situation such as this until 1964.

And the decisions of the Courts in all Circuits to date, so far as I can find, are in complete harmony with the viewpoint that prevailed in the Board prior to 1964.

There can be no question.

The employer's conduct here was in complete good faith.

There is absolutely no showing of anti-unionanimous.

The interpretation made by the employer was reasonable and a study of the situation involved will show that it was completely proper and tenable.

Assuming for the moment that the Union was entitled to relive, it had many alternates that is available to it.

One, it could have gone to a federal part under 301.

It could have gone secondly under -- to the State Court for a contract violation on --

Justice Byron R. White: What would the Union in Court in this situation?

Mr. George J. Tichy: Well, it would seem to me that each position would be that the company violated the provision -- provisions of its contract.

Justice Byron R. White: I know it would be planning although -- the employer violated the agreement by paying too much?

Mr. George J. Tichy: Yes, correct.

That's correct.

It would say that the employer exercised in authority that it did not have under the contract.

Justice Byron R. White: So that it couldn't get damages I don't suppose.

Mr. George J. Tichy: I don't see what the element of damages would be unless of course the -- there would be some inference here that the Union's integrity and reputation --

Justice Byron R. White: So what the -- so is this really very effective remedy going to the Court that you're talking about?

Mr. George J. Tichy: I would say yes.

I've --

Justice Byron R. White: Can't get anything, but you got to go.

Mr. George J. Tichy: Well, it would at least settle this question as it would appear Congress intended that the party should settle disputes between them over contract interpretations.

Justice Byron R. White: So the -- so the Court will say after the Court agreed with the -- agreed with the Union.

Then I supposed it's an injunction?

Mr. George J. Tichy: Yes, I would assume that either specific performance or an injunction might lie, which would get the result that they would be -- which the Union would be seeking.

Justice William J. Brennan: But it seems you haven't mentioned the Section 10 (a) yet.

Mr. George J. Tichy: Actually, it is our belief that Sec --

Justice William J. Brennan: That -- that's also been in the statute since the Wagner Act.

Mr. George J. Tichy: That's correct.

However into the Wag --

Justice William J. Brennan: And that does say that the Board has certain power irrespective of any agreement so forth.

Mr. George J. Tichy: Provided an unfair labor practice exist.

In other words, the Board's powers are very --

Justice William J. Brennan: That's the very issue, isn't it?

Mr. George J. Tichy: Yes.

And of course we're -- our argument here is that no unfair labor practice does exist.

Justice William J. Brennan: Well, that's your position, it's not the Board.

Mr. George J. Tichy: No the Board --

Justice William J. Brennan: But 10(a) -- 10(a) certainly contemplates, it does it?

That the Board shall have certain power to deal with situations like this irrespective of the existence of a collective bargaining agreement, does it?

Mr. George J. Tichy: It con't -- yes.

It -- but you say such as this and this is where unfortunately, I must part company.

The 10(a) is explicit in give --

Justice William J. Brennan: But my point is, surely 10 (a) contemplates that even when a collective bargaining agreement has been breached, that there may be unfair labor practices.

Mr. George J. Tichy: True, however --

Justice William J. Brennan: Notwithstanding the existence of agreement.

But why does it dismiss that case?

Mr. George J. Tichy: Because the Board must first as a threshold matter interpret the contract and we believe that the legislative history is replete with the clear intent of Congress.

That this was not what Congress contemplated the Board should engage in.

As a matter of fact, the record is also complete or replete with the concept of the Congress did want compulsory arbitration.

And actually as I see this case, assuming that the Court should unfortunately decided against me, we've made one gigantic step off into compulsory arbitration.

Why?

Because every contract contains in one form or another, some control over a management right or even a union right so that a brief party can run to the Board.

The Board makes an interpretation and here we have our -- a compulsory arbitration and as you observe in this, our own --

Justice Byron R. White: Yeah, but that's been inherent in making a contract as people starting making contract except that -- instead of running to a board, they come to court.

Mr. George J. Tichy: Accepting that it --

Justice Byron R. White: And you call that compulsory arbitration, with some judge.

Mr. George J. Tichy: In a sense it is, excepting that here, the statutory intent was that the Board should not engage in this activity.

But it should go to a court.

We get to this matter of the Board expertise and it's clear that Congress in 1947 didn't believe that this expertise existed.

And we also get to the case of Dowd Box Company versus Courtney in which this Court articulated which the principles I believe that are applicable in this case.

At page 513 of that case, the Court clearly delineated the authority of the Board.

It was pointed out that while Congress confided primarily interpretation and application of the statutory rules to the Board, it rejected that policy with respect to violations of collective bargaining agreements.

Instead, the Court concluded and I “Congress deliberately chose to lead the enforcement of collective agreement to the usual processes of the law.”

The other alternatives that were available to the Union as I view it, although there may be some question as to which one of thee you may believe to be a more effective than another, they could have gone to State Court as the second alternative.

The third alternative, they could have gone to the Federal Mediation and Conciliation Service sought their intervention in this matter.

And the Federal Mediation and Conciliation Service, I might say from personal experience is a very effective organization.

They could have sought as the fourth alternative, the State Mediation facilities.

The fifth matter which is not formed to a timber products industry of the great Northwest is arbitration on an ad hoc basis.

Sixth, they could have press their point further in collective bargaining under the grievance procedure.

Or lastly as I viewed this matter, they could have waited to the next or to the end of the term of the contract.

And said now, “Looking here Mr. Employer, we didn't like mean what we said back there and requested the appropriate revision in the collective bargaining agreement.

Justice Byron R. White: Mr. Tichy what would be your position if there's an arbitration clause in this contract, was it broad enough to cover this kind of -- that precisely at this dispute?

Mr. George J. Tichy: We would have believed that the arbitration clause should have been pursued and this matter submitted to an arbitration board.

Justice Byron R. White: And no court action.

Mr. George J. Tichy: No, no court action under your trilogy, yes.

No court action, I should have thought.

The Board argument runs that it is entitled to construe the provisions of a labor contract when such construction is necessary to vindicate statutory unfair labor practices when we realized that almost every provision of a labor contract in one sense or another governs, wages outs in working conditions, we can see that the Board can reason its way into almost every dispute over an interpretation of a contract.

It can weigh the respective interpretations and if the construction that it chooses, it is an unfair labor practice, then in their opinion then they can find that an unfair labor practice exists.

As we view it and we pointed out in our brief some appropriate statistics, the Board claims it is overburdened now.

Its trial examiners admit that it is overburdened now.

To open wide the doors that this case would open wide simply would add to the burden of the Board.

One last point, we also feel that industrial stability will result from the Board's unwarranted invasion of contract administration.

The Board is now saying that an employer's action which if the Board determines, he's not allowed by a labor agreement.

That is a contract violation.

Constitutes an 8 (a)(5) or a refusal to bargain unfair labor practice.

In the Ma -- in the Mastro Plastics case this Court held at most “no strike” clauses do not bar a strike which is occasioned by an employer's unfair labor practices.

Any claim of violation, employer violation of a labor agreement, that is any grievance, may thus justify the Union to legally strike in spite of a no strike clause.

This, we believe, will only create chaos not stability in the -- American industrial scene.

To permit the bar to interpret contracts under circumstances such as exists here, clearly circumvents the language of the statute and the manifest congressional intent.

The Board should not be permitted to indirectly accomplish a purpose which has no direct authorization in the Act.

To grant the Board request, we believe, is tantamount to poisoning compulsory arbitration upon American industry when Congress made it very clear that it did not approved of compulsory arbitration of the settlement of labor disputes.

It is respectfully submitted that the decision of the Court of Appeals in this matter was correct.

Thank you.